Decided on November 29,2007

Jm Baxi Appellant
S S KHOSLA Respondents


- (1.) The petitioner claims quashing of an order of the Central Government acting as reviewing authority in terms of Section 129-D of the Customs Act, 1962 dated 20.8.1993.
(2.) Briefly the facts are that the petitioner, a firm, carrying on business at the port of Kandla at the material times was agent of the vessel M.V. "Southern Ace" (hereinafter referred to as "the vessel"). It filed a bill of landing for 3,296.801 MTs of Phosphoric Acid, landed at the Port. The vessel could not be berthed at port on account of its size and having regard to draft restrictions. The imported material had to be thus pumped into the shore tanks of the concerned agency namely the importer IFFCO. A certificate was issued on 20.11.1982 by M/s Ericson and Richards as to the quantities. According to this report (hereinafter referred to as "the Ullage Report"), the quantity ultimately pumped into the shore tanks were 3103 MT. Though the bill of lading or the manifest of the vessel showed 3296.801 MT of phosphoric acid, the bill declared affirmed 3262 MT and ultimately 3103.152 MT was found as the correct figure in the Ullage report.
(3.) The customs authorities issued a show cause notice calling upon the petitioner to satisfy it as to why penalty in terms of Section 116 of the Act ought not be imposed for the short landed goods. The proceedings were resisted; eventually an order was made by imposing a penalty of Rs. 4,30,000/- upon the petitioner, on 30.9.1998. This order was appealed against; the Collector of Customs (Appeals) by order dated 1.9.1989 reversed the Adjudicatory order and remitted the matter for fresh consideration, to the adjudicating authority i.e. Deputy Collector of Customs at Kandla. The Deputy Collector confirmed the previous findings regarding penalty of Rs.4,30,000/- rejecting the Ullage report and holding that only an allowance of 2% could be accepted by way of ocean loss, since that was the permissible limit prescribed by executive instructions. He however noticed the peculiar nature of the goods and the tendency of sludge formation during long voyage.;

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